Decent profits for IMC in 2015
IMC Financial Markets released their annual profits and trading income last Wednesday. The trading income rose 12% to €587 million. The net profit rose with the same percentage to €185 million. That’s €20 million more than 2014.
Rob Defares didn’t split up where most of the money was generated. But it’s no secret the US trading business has contributed most to the profit.
Some of the moves in the US have received serious attention in the press. There’s this payment-for-orderflow (PFOF) deal with broker Convergex. And of course in 2014, the move to the big board.
Average bonus €182k
IMC Financial Markets employed on average 520 people last year. The bonus pool for the employees was €95 million. On average that’s €182k per employee. This variable compensation is only 45% of the total salary costs. This means on average IMC staff earned €400k each.
However, average pay doesn’t say much when the distribution is pyramid style. The shareholders Rob Defares and Wiet Pot will receive a €130 million dividend. The Quote 500 rich list will mark them higher again.
Expected more
While a trading income of €587 million a year is amazing – more than €2 million a day – I expected a bit more. See the graph of annual profits on top of this post. 2015 was a great trading year with some heavy swings in the summer. Perhaps it’s just a sign of an overcrowded competitive market. Profits under pressure even with perfect trading conditions.
IMC traders moved to Tower Research
After the bonus day in 2014, a dozen IMC traders left the firm “with a cloud of suspicion hanging over their heads“. They surfaced last year at Spire Europe, which is a part of Tower Research. They are reportedly doing very well.
At Tower Research there’s also a second team of ex-IMC traders in the USA. They hired a trader who received one of the highest bonuses in IMC Chicago (number four on the list).
Market in Optiver’s profit 280-290
Optiver is usually a bigger fish than IMC when it comes to profits. Their figures aren’t released yet. We need some patience to compare the four most visible trading outfits. My market in Optiver’s profit in the meantime is 280 bid, at 290.
No more exchange holidays
More trading days in a year is positive for traders. We’re lucky. Between last Easter and the next one in 2017, there’s only one exchange holiday (December 26th). All other regular exchange holidays are on a Sunday. No half day trading days end of December. At least it’s easy to remember.
your offer in optiver market is taken and am bidding it now any size.
The remark in the newspaper article that the bonus pool is 45% of the total salary expenses (base + bonus) was probably a typo that we can check once the annual report is filed. It’s not the like the journalists at HFD know what they’re talking about, you know better than that Jack!. Most likely what they meant to say is that the total salary expenses are 45% of IMC’s costs, the rest of course being infrastructure, hardware, rent etc. This implies a bonus percentage around 35%. In any event, an average base salary of more than 200k has no meaning, there’s no question that only a handful of IMC”s employees will enjoy such a fixed salary.
Maybe IMC is already preparing for Mifid 2 – raising salaries.
But agreed – it can’t be correct.
if the optiver profit offer isnt net profit then, buy ’em
What’s Maven profit?
Buy’m at 290.
I wouldn’t sell at 300. Nor at 350. Or 400
@John Doe
Where’s your bid then, for Optivers profit?
What does the abbreviation IMC stand for?
International Marketmakers Combination (catchy!)
congratulations, it’s a new record year for IMC, the growth of this company is amazing, that’s why it will never go public!
Optiver had the best year of its history. I buy 290 size.
350-360
are Bart Broks and Koen Huisman in the same team at Tower Research?
Rumors are that their options market making algos are doing quite well.
What is an option market making Algo?
whatever happened to Ab Zout?
What’s blurring the picture in this graph is that the pay out ratio at IMC has decreased graduadly, but significantly since 2007. By itself leading to a bigger profit on shareholders level.
When I look at Flow Traders employee compensation I see 21 million fixed and 88 million variable.
There are 268 employees. This means average compensation of 406.000 euros. I know that the two CEOs received 3 million bonus. When we take away 15 million for example from this employee costs. We get to an average of 350.000 euros.
Is this a decent estimate for the average compensation for working at flow traders?
I’d say yes. Also, their report also shows 32 employees getting 1mm+ comp, so that gives some idea of the distribution
Does that mean you can expect to make more at flow traders in the long run as a trader than IMC/Optiver?
Well you won’t get a job at either
You dont even know me
i dont have to.
none of these companies take experienced traders, and if you were any good your current bucket shop would pay you well
I am still in school, but thank you for giving information @ANONYMOUS
APRIL 7, 2016 AT 1:41 AM
Seriously though, is there any chance to get to top shops being experienced trader (3-5y) from smaller prop, or they don’t do that at all?
if you bring them a working strategy different from what they already have they will be glad to hire you. But why would you go there if you have such a strategy?
no they dont, and if you had a good strategy you would take it to a place that offered a better cut and lower costs.
Can you provide examples of firms I can take my good strategy for a better cut please?
The big two names right now are WorldQuant and Autumn Compass. They both have different deals specs, but simply put they put up the tech, the connections, and the money, they’ll take 100% of the profits up till a certain amount then after that all profits will be shared by you and them.
WorldQuant has massive infrastructure world wide and they’re really smart, the guy that runs the place even wrote a book called “Finding Alphas” which as you have probably already guessed is chock-full of alphas and edges.
You’re not going to find a better place other than the two mentioned above.
Lol, post above written by a recruiter.
@644 seriously go back to cold calling traders and offering them “new and exciting opportunities”
You recruiters are a rung below real estate agents and politicians
[…] is expensive and the cash flow of IMC will probably help McKay/Quincy. According to Amterdamtrader, the net profit of IMC was €185 million in 2015 (€20 million more than 2014). With all that […]